PC Shipments Rose on Software Upgrades, Looming Tariffs

Date : 10/10/2019 @ 11:00PM
Source : Dow Jones News
Stock : HP Inc (HPQ)
Quote : 19.985  0.335 (1.70%) @ 8:45PM

PC Shipments Rose on Software Upgrades, Looming Tariffs

HP (NYSE:HPQ)
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2 Months : From Sep 2019 to Nov 2019

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By Maria Armental 

Personal-computer makers saw strong growth in third-quarter shipments as buyers rushed to upgrade machines to run Microsoft Corp.'s latest Windows software and dodge looming tariffs on imports from China that could drive up prices, according to preliminary data from three research firms.

However, PC makers face an uncertain fourth quarter, the firms said. The upgrade cycle -- prompted by new software not designed to run on some older machines -- is expected to wane. The fourth quarter includes holiday sales and could see customers trying to avoid additional U.S. tariffs on Chinese goods that are slated to take effect in December. PC makers have been shifting production to other countries, such as Taiwan and Vietnam, to skirt the trade levies.

Ishan Dutt, an analyst at research firm Canalys, said he expects shipments to level out in the fourth quarter and to remain flat to potentially down in the first quarter.

PC shipments rose to 70.9 million units in the September quarter, which was the best third-quarter performance since 2015 and the 4.7% increase from a year earlier was the highest growth rate since the first quarter in 2012, according to preliminary data from Canalys. Sales in the third quarter are historically driven by back-to-school sales and business purchases.

Another firm, International Data Corp., said PC shipments reached 70.4 million in the quarter, up 3% from a year earlier. The shipment total was the highest IDC recorded since the fourth quarter of 2017, when the total was 70.8 million units.

Gartner Inc., meanwhile, said shipments increased a more modest 1.1% to 68.1 million units and attributed much of the increase to the Windows 10 refresh cycle. Lower component prices also helped top PC vendors improve profit margins, which in turn helped strengthen their market positions, Gartner said.

Much of the difference in the data from the firms comes from how each company defines PCs. Hardware makers in recent years have increasingly blurred the lines between personal computers and devices like tablets.

Shipments in Japan, the three firms noted, showed strong growth, driven by the new software cycle and customers buying to avoid a sales tax increase that went into effect this month.

The data also showed further consolidation in the PC market, with the top three vendors -- Lenovo Group Ltd., HP Inc., and Dell Technologies Inc. -- grabbed more than half of the market share.

 

(END) Dow Jones Newswires

October 10, 2019 18:45 ET (22:45 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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